Friday, July 6, 2012
Shining the Light on BrightSource Energy's $1.6 Billion Shady DOE Deal: Special Seven, Part Two
Then add more investor connections –– one of whom went on to be a 2008 Obama campaign advisor and then a DOE advisory role under Secretary Chu. Another was a 2008 Obama bundler who just so happened to be a frequent White House visitor, while the other was related to the former Speaker of the House. The mix is topped off with a high-powered lobbyist with White House connections, and several SolarReserve board members who just so happen to be 2008 (and 2010) Democrat, Harry Reid, and Obama donors.
The combination is a recipe for SolarReserve’s $737 million DOE “noninvestment” grade loan guarantee, which was rated a BB by Fitch and potential millions in a 1603 tax-free grant—both programs implemented under the 2009 Obama Stimulus package.
SolarReserve is only the first chapter in our green-energy crony-corruption story. The next is BrightSource Energy. Like SolarReserve, the BrightSource tale also has interesting political ties: Obama, Reid and Democrat donors, as well as a DOE advisor. However, it gets even brighter when you look into its high-powered investors.
As featured in the introduction, here is a quick overview of BrightSource’s green-energy crony-
BrightSource Energy has a three-unit power system project known as “Ivanpah,” located near the California/Nevada border, south of Las Vegas, which uses a proprietary power-tower solar thermal system. Ivanpah I and III have a BB+ rating while Ivanpah II is BB. On April 11, 2011, the DOE announced the finalization of $1.6 billion in loan guarantees for BrightSource’s Ivanpah project. The apparent “payoffs” to Democrats are myriad—the company having donated at least $21,600 to Democrats since 2008 (and zero dollars to Republicans). According to a Washington Free Beacon report, Senator Harry “Reid received almost $4,000 from Brightsource executives in the 2010 cycle, including $2,400 from CEO John Woolard, who hosted a fundraiser for the majority leader. Woolard is also a Barack Obama donor and has visited the White House 10 times since Obama took office.” Additionally, Sanjay Wagle (a significant 2008 Obama campaign supporter and contributor), a principal at Vantage Point Partners (the major stakeholder in BrightSource) was an advisor at the DOE at the time the loan was approved. And, John Bryson, BrightSource Chairman, became Obama’s Secretary of Commerce (although he resigned in June following a series of mysterious auto accidents) and has ties to an organization that helped craft the stimulus package.
The above thumbnail introduced the key players. Here we’ll really get to know them and, more specifically, their connections to the Obama administration.
John Bryson was Chairman of BrightSource Energy prior to his appointment as Secretary of Commerce with the Obama White House in May 2011—shortly after the BrightSource loan was approved. Bryson’s appointment was confirmed in October. The Washington Free Beacon reports: “According to financial disclosures, Bryson had up to $500,000 in stock options from BrightSource and a $700,000 advisory fee from Kohlberg Kravis Roberts, an investment group that has bought a number of solar farms in California. He was also the CEO of Edison International, which obtained exclusive power purchase agreements for four of the solar projects, at the time the awards were issued.”
Bryson also has ties to Obama supporter George Soros. In 1970, Bryson was a co-founder of the National Resources Defense Council (NRDC), which is funded, in part, by the Tides Foundation, to which philanthropist George Soros has donated more than $7 million over the years. Ron Arnold of the Green Tracking Library says: “the NRDC is one of the richest, most snobbish elite Big Green groups in America.” The NRDC is a member of and funder for the Apollo Alliance, a far left organization, which has boasted about being behind several of the Obama administration’s “green” initiatives, in addition to crafting “green” sections of the stimulus bill. (More on the Apollo Alliance in a future column.)
John Woolard is President and CEO of BrightSource Energy. A March 16 2012 hearing before the House Oversight and Government Reform Committee (HOGRC) revealed that Woolard used his connections to try to get a “commitment” for the DOE loan for BrightSource—despite the fact that Secretary Chu has repeatedly said the loans were based on merit. During the hearing, Woolard said: “I believe that everything we did in our project was fully on the merits. It was a very solid project.” Yet, a series of emails involving Woolard show him interacting with decision-makers in the administration seeking political influence. HOGRC Chairman Issa told The Hill: “Clearly we have a discovery of emails showing there was direct conversation intended by the people having those conversations to be lobbying all the way up to and including President Obama.”
The emails reveal communications between Woolard and Matt Rogers, senior adviser to the secretary of energy for the Recovery Act, and between Woolard and Jonathan Silver, executive director of the Energy Department loan program. The January 2010 Woolard/Rogers email referenced a conversation between Peter Darbee, then-CEO and chairman of Pacific Gas and Electric, and President Obama that addressed the program’s challenges. At the hearing, Rep. Jim Jordan, R-Ohio, emphasized to Woolard, PG& E and Darbee “had a vested interest in getting this thing approved because you were providing them their required commitment for green power.” The March 7, 2011, Woolard/Silver email asked Silver to look over a letter drafted by Woolard and then-Brightsource chairman John Bryson that requested direct White House influence in BrightSource’s loan guarantee application. The letter, intended to be sent to then-White House Chief of Staff Bill Daley, said: “We need a commitment from the WH to quarterback loan closure between OMB and DOE.” It also included a request for “guidance and support from the White House.” One month after the email exchange asking for “direct White House influence,” the $1.6 billion federal loan guarantee was approved. Even the Washington Post confirms that: “venture capitalists who held advisory roles with the Energy Department were given access to Obama’s top advisers.”
According to the Washington Examiner report, “President Obama discussed the Department of Energy loan program with a stakeholder dependent on the DOE, and the conversation appears to have expedited the process.”
The “stakeholder” (Darbee) and Rogers and Silver each have their own interesting “connections” that can be found on the Green Corruption Blog.
Sanjay Wagle, according to the HOGRC report, “has most recently served as Renewable Energy Advisor to DOE under Secretary Chu.” The report continues, “Prior to arriving in Washington, Wagle was a principal at Vantage Point Venture Partners, a cleantech venture capital firm whose investments received $2.4 billion in taxpayer funds….His former firm and the companies it invested in, therefore had a large stake in the financing decisions being made by DOE at the time.” Wagle joined the DOE just as, according to the Washington Post, “the administration embarked on a massive program to stimulate the economy with federal investments in clean-technology firms.”
In addition to being a major stakeholder in BrightSource, Vantage Point received different types of government funding for at least nine green energy projects. (Note: Robert F. Kennedy Jr. is a Partner and Senior Advisor at Vantage Point.) The HOGRC report lists three of the nine projects, so the $2.4 billion cited in the report is probably really much higher.
Wagle was an Obama fundraiser for the 2008 campaign through his Clean Tech for Obama group. In time for the 2012 election cycle, Wagle left the DOE and has returned to California to work as an investor and clean-tech advisor. Like some of his DOE peers (Steve Spinner and Steve Westly), he has probably gone back to fundraising for Obama.
Bernie Toon, who served then-Senator Joe Biden as his Chief of Staff, became a lobbyist for BrightSource Energy on March 6, 2011. According to the Wall Street Journal, “BrightSource spent more than $500,000 on lobbying in the third quarter of 2010 through the second quarter of 2011.” $40,000 of the lobbying money went to Toon—which paid off immediately. Toon, and BrightSource executives made two visits to the White House in March. The loan was approved the following month. Toon’s contract ended the day after BrightSource got the loan.
In addition to these high-profile connections, BrightSource Energy’s investors include other top Obama donors including Google, Morgan Stanley, BP Alternative Energy, and Goldman Sachs—though, according to Forbes, “the federal loan guarantee is financing the bulk of Invanpah’s construction costs.”
As we’ve seen with SolarReserve, and now with BrightSource Energy, the companies who get the government funding are those with inside connections that may be decades old, as in the case of Toon, or current, as in the case of John Bryson, who would still be Secretary of Commerce if not for the recent car incidents. Sadly, the widely publicized Solyndra story, SolarReserve and BrightSource Energy are just three of the many stories in the green-energy crony-corruption saga. Next week, we’ll profile two energy companies not only in Senator Harry Ried's back yard, but with unique political connections and even DOE violations.
Author’s note: Thanks to Christine Lakatos, the Green Corruption blogger for research assistance.
Research Assistant note: Oh and by the way, BrightSource Energy's loan was basically a bailout, a clear violation of the American Recovery and Reinvestment Act of 2009 (AKA "Obama's walking around money"). As Peter Schweizer puts it in Throw Them All Out, describing the financial issues they were having, "BrightSource badly needed this infusion of taxpayer cash."
This, the emails, lobbying stunt, etc. –– just proves their obvious desperation in getting the DOE funding. Further, it shows (along with such a low investment grade, being "speculative" at best) that they weren't a solid company –– "based on MERIT" –– like Secretary Chu and the CEO John Woolward (who has a 1.6 percent stake in the company) have been claiming, even in sworn testimony.
First Published July, 6, 2012 by Marita Noon, Executive Director of Energy Makes America Great, at Townhall.com –– More Obama Green Energy Corruption
And here at Green Corruption –– Shining the Light on BrightSource Energy's $1.6 Billion Shady DOE Deal –– Special Seven, Part Two